SMEs seek financial oxygen to face uncertainty

Alberto Velazquez
Updated: 05/15/2022 04:35h
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The Spanish Confederation of Reciprocal Guarantee Societies (SGR-Cesgar) presented this week the results of the 'XI Report on the Financing of SMEs in Spain', an exhaustive review of the financial situation of this type of company, marked by times of pandemic. According to this work, six out of ten (more than two million) have had financing needs in 2021, the highest percentage in the historical series... and only two out of ten have started the process of economic recovery.

Antonio Couceiro, president of SGR-Cesgar, highlighted how nearly 40% say they are in a stable position and how the number of SMEs in economic stagnation and financial deterioration has increased (from 4.6% to 11.8%), with compared to the previous report.

The data does, however, point to a hopeful and logical rebound after the rigors of a year like 2021: 46.9% of SMEs expect their turnover to increase in 2022. Most have required financing for working capital (75.2 %), followed by investment (37.2%). Financing needs (57.9%) that increase even more (83.4%) if micro-enterprises (less than 10 employees) are excluded.

46.9% of SMEs expect their turnover to increase in 2022

Other interesting indicators are the reduction in the average size of companies, both in terms of employment and annual turnover, in addition to the 11.4% who affirm that it will create jobs. In any case, and as Couceiro points out, "there has been a very significant growth in the financing needs of SMEs during 2021, in accordance with their needs to obtain working capital for
being able to survive in the pandemic crisis
, and have liquidity to continue growing. There is a high level of satisfaction regarding the different sources of financing, such as credit to suppliers».

With regard to the guarantee needs of SMEs, the study highlights differences depending on business size: if 38.5% of small companies and 33.3% of medium-sized companies indicate that they needed guarantees in 2021, this indicator falls 19.3% in micro-companies and 15.2% in the self-employed.

growth keys

Business development vectors such as exports are also analyzed, with 6.5%, still much lower than the pre-pandemic data (8.5% in 2019), as well as digitization and sustainability. "It is relevant (highlights Couceiro) that the self-employed and SMEs (around 20%) have invested in digitization and sustainability, and another 20% have stated their intention to do so in the next three years."

Antonio Couceiro: "It is relevant that about 20% have invested in digitization and sustainability"

Commercial credit (23.7%) and bank loans (22.5%) stand out among the most used products, followed by ICO lines (19.7%), bank credit lines (17.8%) and leasing (12.6%), along with options such as supplier credits, 'confirming', 'factoring', etc.

Returning to the financing needs of companies, by sector, agriculture, livestock, forestry and fishing, manufacturing industry, energy and water and hotels and restaurants have been those that have shown the greatest financing needs. Requests for support that, at least, have found a relatively stable scenario and some ease in access to financing: 63.3% of companies with financing needs indicate that they have not encountered difficulties, in the face of obstacles such as lack of guarantees requested (14.8%) or the price (14.5%).

In the case of non-bank external financing, a large increase has been detected, 27.2% in 2021 (5.5% in 2019), typical of options such as venture capital, family offices, etc. "It is a disruptive fact (underlines the president of SGR-Cesgar), in line with the drive of the EU and the Spanish government to obtain alternative sources of financing."

A scenario in which 34.5% of those surveyed state that they are aware of the existence of SGRs, and their role in endorsing and advising companies when faced with financing needs. And the number of SMEs that have resorted occasionally to one of them is growing: from 5.7% to 11.8%, valuing aspects such as improved access to financing (81%), adequate advice (80% compared to 73% in 2019), the possibility of greater amounts in bank financing (71% compared to 64% in 2019), etc.

Financial instruments used by SMEs

Percentage of total companies

Rating on a scale of 1 to 10

Supplier credits (commercial credit)

Credits or loans from ICO lines

Bank line of credit or bank discount

Leasing or financial leasing

Endorsements and other guarantees of the SGR

Confirming (advance payment to suppliers)

Factoring (temporary assignment of invoices, etc.)

Crowdfunding or Crowdlending

Financing needs of SMEs

Detail by sector of financing needs

Agriculture, forestry and fishing

Telecommunications and information society

Education, health, social services, culture and sport

Manufacturing, extractive, energy and water industry

Hospitality and restoration

Trade, workshops and personal services

Detail by tranches of financing needs

Companies with 1 employee (self-employed)

Medium company (from 50 to 250 employees)

Microenterprise (from 2 to 9 employees)

Small company

(from 10 to 49 employees)

Financial instruments used by SMEs

Percentage of total companies

Rating on a scale of 1 to 10

Supplier credits

(trade credit)

Credits or loans

of ICO lines

bank line of credit

or bank discount

Leasing or lease-

financial lie

Guarantees and other guarantees

of the SGRs

Confirming (advance payment

to suppliers)

Factoring (temporary assignment

of invoices, etc.)

crowdfunding or

Crowdlending

Detail by sector of financing needs

Telecommunications and information society

Education, health, social services, culture and sport

Trade, workshops and personal services

Hospitality and restoration

Manufacturing, extractive, energy and water industry

Agriculture, forestry and fishing

Detail by tranches of financing needs

Companies with 1 employee (self-employed)

Microenterprise (from 2 to 9 employees)

Small business (10 to 49 employees)

Medium company (from 50 to 250 employees)

New times for an already established model that contributes to increasing the essential lifeblood of financing, as Couceiro points out: "The use of SGR guarantees has given the self-employed and SMEs a better situation to apply for bank loans, with lower rates of interest, longer terms and shortcomings».

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